True and False

1. The maintenance cost approach assigns a monetary value to an environmental service equal to the damage done when that service is unavailable.

2. The maintenance cost approach and the damage cost approach should theoretically produce the same monetary value for natural capital.

3. The damage cost approach to valuing natural capital always produces larger values than the maintenance cost approach.

4. Using the replacement cost method, if it costs $12 per hour to hire someone to clean your house, then the time you spend cleaning your house should be valued at $12 per hour.

5. The opportunity cost method for valuing household production looks at what it would cost to have the same services provided by paid workers.

6. The opportunity cost method of valuing household production considers the wage the individual doing the household work could have earned at a paid job.

7. The opportunity cost method and the replacement cost method will generally produce the same monetary estimate of the value of household production.

8. Suppose that logging on a hillside above a town has exposed the town to the threat of flooding. A flood would cause $10 million in damage to the town but they decide to build a small dam for $2 million. Using the maintenance cost approach, the value of the flood-prevention environmental services provided by the trees that were logged is $2 million.